In the 1980s it was New Zealand’s breakneck economic reform program that impressed Australians. Now it is the clear-sighted style of leadership practised by NZ Prime Minister John Key’s National-led minority government that we could benefit from. Mr Key is introducing the next generation of reforms. His approach is methodical, not ideological, and he has been extremely careful not to break promises.

During his visit to Australia this week to drum up investment Mr Key said he believed it was important to talk openly to the electorate about the values of his government, only introduce policies which delivered identifiable benefits for voters, and focus on keeping his word. He is clear about the choices the country faces and its place in the world and has adopted mostly orthodox economic policies that suit NZ’s opportunities.

The conservative Key government has delivered genuine tax reform, increasing the goods and services tax to 15 per cent and cutting the top income tax rate to 33 per cent and the company tax rate to 28 per cent. Labour market reform has made the NZ job market more flexible – several Australian food manufacturers have shifted to NZ recently, owing to a substantial wage differential and less union trouble. Mr Key’s journey from humble beginnings to NZ’s wealthiest MP has given him a licence to undertake social welfare reforms such as drug testing for welfare benefits and means testing of the age pension. The Key government in on track to balance its budget without the tricky spending shuffle that marked Wayne Swan’s latest effort, and plans to part-privatise state enterprises including power generators. This week he postponed full implementation of NZ’s emissions trading scheme, because of slower global growth, lack of global action and the risk to jobs.

It is true that NZ is simpler to govern than Australia. NZ is the size of one of our large states and does not have a two-speed economy. But it does have the challenge of a relatively high exchange rate and mixed member proportional voting checks the power of major parties. As reassuringly dependable, orthodox yet “decisive” – for example when choosing in the aftermath of the Christchurch earthquake to pay a $400 a week subsidy to the city’s workers, against official advice – Mr Key’s practical but focused leadership style is benefiting NZ. It would be welcome on this side of the Tasman given the political mess festering in Canberra.